hey there , so im worked and indicator based on 3 supertrends and 1 osma as its strategy , gave the indicator dashboard to calculate winrate and other stuff , gave it tp and sl levels based on ATR value , been running it for a while and i even published it , but i got a question from a buyer that made me curious , he got 90% winrate and positvie profit on dashboard , but he stated that he works on 0.5 ATR tp and 3.0ATR sl , which is a very bad RRR , im willing to test this on my real account (funny enough its my creation but neve saw it this way) and see if will work but first i wanted to ask the community , maybe i get a new idea to improve the strategy and indicator.and i attached an indicator that i made that is based on 2 ma cross , it has dashboard of winrate and other stuff , and it has tp and sl option to draw on chart , is gift to you Ambitious_MA.ex4 (28.8 KB)
There are no rules in trading to tell you what your win rate must be or what your r:r ratio must be.
A very high win rate is a good ācushionā against losses and it suggests a strong attention to chart technical analysis. Probably 90% is as close to perfect as itās possible to get, no doubt the TP much closer to the entry than the SL helps.
But a very unbalanced r:r ratio is a concern and here Iām talking about achieved r:r after the trade, not planned r:r when the position is being planned and opened. Such an imbalance will become a problem if the trader has a series of losing trades - unlikely but not impossible.
Exactly , i agree , having higher winrate that will eventually make you money is a good thing even if losers are bigger than winners , as your mental state will be better when you are hitting profits more often than hitting stops . thanks for your comment.
in professional and institutional trading circles, an āRā of around 0.7 is very common, and an R above 1.0 is much rarer
i would not be willing to trade that way, myself, and many intraday retail traders would not in practice even be able to cover spreads and commissions, on that basis - many would need such a high win-rate, with that R, as to be impracticable, so i think thatās taking it (much) too far
Iām very curious, your negative RRR means you make a lot of profit for every loss, but over the long term, can this really be profitable? The win rate may be high, but wouldnāt the earnings disappear after a few losses?
I think that when people say ānegativeā RRR, they normally just mean āless than 1.0ā, not really negative at all.
Why does it mean this?
This information matches my very limited second hand knowledge of 2 former colleagues who now trade for a living, one has reward to risk of two thirds (0.67) and the other three quarters (0.75), of course each with high win rate. Both are encouraging me accordingly.
I have also read (but this is only internet information) that among people doing prop firm challenges, the few who pass mostly have low R and high win rate, and people who try with higher reward to risk like 2/1 are normally in the failing majority. I believe this, anyway.
